There are more houses for sale in Minnesota this spring as compared to last, but high mortgage rates, renewed inflation and difficult economic conditions are continuing to affect the real estate market in the Twin Cities and statewide.
That’s according to a new report from Minnesota Realtors, an association representing more than 21,000 realtors.
“More listings and more sales are encouraging signals heading into the heart of the spring market, but monthly payments are still the biggest hurdle for most households,” said Wendy Uzelac, president of Minnesota Realtors.
New listings in the Twin Cities metropolitan area rose nearly 9 percent over the year ending in April.
Pending sales, where there is a signed purchase agreement, also spiked. They were up 7.4 percent statewide and 6.9 percent in the metro over the period in question. Median sales prices, meanwhile, fell 2 percent in the metro and remained flat statewide.
“Real estate is hyper local. It always really varies neighborhood to neighborhood,” said Michaela Toohey, a realtor with Coldwell Banker.
She said her clients experienced an active April with buyers signing purchase agreements. But Toohey said that the market remains unbalanced.
“This has been the same story for many spring seasons … low inventory,” Toohey said. “I am really seeing that out there, working with clients, and I’m seeing it not just like with first-time or entry level buyers, but I’m seeing it at … all sorts of price points in the market. We just don’t have enough homes for sale, and it’s just been this way for many seasons in a row.”
Realtors said the market has calmed compared to the frenzy of activity during and immediately after the pandemic, but mortgage rates are still a barrier.
Move-up buyers and downsizers with equity continue to drive this market,” said Aarica Coleman, president of Minneapolis Area Realtors. “Affordability hinges so much on rates. Homeownership continues to be most accessible to people who already have some capital.”
Toohey believes economic uncertainty may also be causing some to sit on the sidelines.
“There are a lot of questions that people have about just overall, how the economy is doing, and some people wondering about job stability as well,” Toohey said. “I certainly have some sellers that have told me … they’re waiting to just sort of feel out their job security and to make sure that they feel secure before they move forward with real estate purchases.”
